Property rights: Government indicating right, turning left

THE alleged grabbing of five houses by the First Lady Grace Mugabe has once again brought to the fore the concerns over the violation of property rights and lack of security of tenure, which have been cited as major impediments to attracting investment.

By Kudzai Kuwaza

Grace was dragged to court last month after allegedly invading three upmarket houses in Harare belonging to Lebanese businessman Jamal Ahmed, a diamond dealer and business tycoon, over a US$1,3 million diamond ring dispute.

High Court judge Justice Clement Phiri on December 21 issued a provisional eviction order directing Grace (second respondent) and her accomplices — her son Russell Goreraza (first respondent) and her security aide Kennedy Fero (third respondent) — to vacate, within 24 hours, three upmarket properties belonging to Ahmed.

The occupied Harare houses are number 409 Harare Drive in Pomona and 18 Cambridge Road, and 75 King George Road, both in Avondale.

Despite having been ordered to vacate the premises within 24 hours, Grace has reportedly invaded two more houses belonging to Ahmed. Grace has however denied grabbing the properties.

In a new twist, the police now claim the properties were placed under police guard as part of an investigation into criminal allegations against Ahmed, including fraud, theft, money laundering, purchase of minerals, exchange control laws and duping Grace in the US$1,3 million diamond ring scandal.

The alleged invasion of the houses by President Robert Mugabe’s wife is the latest in a series of property invasions, starting with the chaotic and often-violent land reform in 2000 which has spawned serious concerns over the government’s disregard for property rights.

The land reform programme, ostensibly carried out to address colonial imbalances in land ownership by taking over farms from whites and handing them to the black majority, continues to be a messy affair with invasions now being carried out on even black farmers — the supposed beneficiaries of the programme. Nothing epitomizes this more than the frantic efforts of Reserve Bank governor John Mangudya in fighting for his farm not to be expropriated by government last year. Mangudya bought the farm in December 2000 from a white farmer, but the government compulsorily acquired it, which resulted in the central bank governor seeking recourse at the High Court.

In the application filed at the High Court on April 7 last year, Minister of Lands and Rural Resettlement Douglas Mombeshora was listed as a respondent. In his founding affidavit, Mangudya said the acquisition of his Inyamasitza Farm in Makoni District was erroneous and that the court must order its immediate reversal. Government made an embarrassing volte face stopping the invasion but only after having opposed Mangudya’s application.

Individuals are not the only victims of the lack of security of tenure. Mining giant Zimplats is fighting to hold onto its land that government intends to take over.

According to a government notice published last week, the authorities intend to compulsorily acquire 27 948 hectares of land held by Zimplats under Special Mining Lease Number 1.

“Notice is, hereby, given, in terms of Section 398(1) of the Mines and Minerals Act, that the President intends to acquire compulsorily part of the land held by Zimplats (Private) Limited under Special Mining Lease Number 1,” reads part of the notice.

Zimplats has opposed the take-over of the land, which holds vast platinum ore deposits and lodged an objection to the compulsory acquisition.

Zimbabwe Stock Exchange-listed wine and spirit maker African Distillers (Afdis) is also in talks to stop the government from acquiring the company’s Springvale Estate amid fears that it could affect the supply base of its local products and result in the loss of jobs.

Government last year arbitrarily took over all diamond mining firms, evicting several companies, including Anjin and Mbada Diamonds and ordering them to leave behind equipment and vacate their premises in another episode of the violation of property rights.

The failure to respect property rights is a matter of major concern to investors as revealed by Australian ambassador to Zimbabwe Suzanne McCourt in an interview published in the Zimbabwe Independent last week.

“I think one of the key areas for Zimbabwe is the clarity on property rights in terms of agricultural development,” McCourt said.

“At the moment, my understanding is that it is very difficult, for example, for an investment in the agricultural sector because of the inability for people to borrow from banks and for foreign investors to come and secure a lease. So that needs to be clarified before we can see any Australian investors in the agricultural sector.”

This has had a major impact on investment as the country’s foreign direct investment inflows show.

According to the United Nations Conference on Trade and Development, FDI in Zimbabwe has plummeted from US$545 million in 2014 to US$421 million the following year.

The alleged grab of residential properties by Grace sends the wrong message to investors, according to economist John Robertson.

“It is a frightening issue and a reflection of the belief among government people that they can take whatever they want. All property rights are at risk,” Robertson said. “The investment mechanism depends on the respect of property rights.”

Robertson’s assertions are substantiated by one of the resolutions at last month’s Zanu PF conference in Masvingo which calls for the take-over of all remaining white farms. Should that be implemented, it would have a devastating impact on not only investment prospects but on government’s current efforts to improve Ease of Doing Business Reforms of which respect of property rights is a major component.

Bulawayo-based analyst and Crisis Coalition spokesperson Dumisani Nkomo said the grabbing of properties while carrying out Ease of Doing Business Reforms shows that “government is indicating right but turning left”.

“The grabbing of properties sends a terrible signal to investors in terms of property rights and security of tenure,” Nkomo said. “It flies in the face of the concept of property rights and erodes investor confidence as well as the suitability as an investment destination.”